As predicted, Britain's election ended in a hung Parliament with no one party achieving an overall majority of seats. There was a considerable swing, however, away from Labour to the Conservatives who saw their share of the popular vote increase from 32 to 36 per cent.

Labour's share of the popular vote decreased considerably, from 35 per cent to 29 per cent, which is not far off from its historic poor result of 27.6 per cent in 1983. The Liberal Democrats increased their vote by one per cent to 23 per cent, a respectable result but a disappointing one for party leader Nick Clegg, whose support had surged in the aftermath of the televised television debates.

The Conservatives have gained close to 100 seats and are now the largest party in Parliament with 307 seats but they lack an absolute Parliamentary majority, even if they join forces with their Ulster Unionist allies. Gordon Brown is, therefore, right not to resign as Prime Minister for the moment but it is also right that the Conservatives, as the largest party, are given the first chance to try and form a government.

Mr Clegg's declaration that the Conservatives had gained "first right" to attempt to form a government in the national interest resulted in Conservative leader David Cameron offering the Liberal Democrats a "big, open and comprehensive offer" to join forces and support a minority Conservative government or even a "stronger, more collaborative" option, saying there was common ground between the two parties.

It is in Britain's interest to have a strong stable government with a comfortable parliamentary majority in order to tackle the country's very serious economic situation and huge budget deficit. A Conservative-Liberal Democrat coalition would be the best option in the circumstances. There has been a large swing against Labour, which has been in power for 13 years.

However, there are clear differences between the Conservatives and the Liberal Democrats over a whole wide range of issues, including tax and economic policy, electoral reform, immigration, Europe and the country's Trident nuclear deterrent, so an alliance will not be easy. It is important, though, that, in discussions with the Liberal Democrats, the Conservatives do not act as if they have an overall parliamentary majority, which they do not. They must also be prepared to compromise, especially on electoral reform and to offer the Liberal Democrats Cabinet posts.

A failure by the two opposition parties to reach an agreement on the formation of a new government could pave the way for coalition talks between Labour and the Liberal Democrats. Such a government, however, would be short of a parliamentary majority and would depend on the support of the Scottish and Welsh Nationalists and, possibly, also Northern Ireland's Social Democrat and Labour Party, a somewhat risky scenario.

Mr Brown has said that, should the talks between the two other parties fail, he would be willing to open negotiations with the Liberal Democrats - who, after all, have more in common with Labour than with the Conservatives - to try and reach a common programme with an emphasis on economic recovery and electoral reform.

Mr Clegg, however, cannot ignore the fact that Mr Brown is not a popular figure and is largely responsible for the country's huge deficit. Mr Clegg's conditions for joining a Labour-led government could not only include electoral reform but also Mr Brown's resignation and his replacement by another Labour leader, which, in the circumstances, is not an unreasonable demand.